Only just over 1 in 10 (13%) of cryptoasset authorisation applications were approved by the FCA in 2023-24, according to the regulator’s annual report.

Over 87% of crypto registrations were rejected, withdrawn or refused, with 44 firms now having money laundering registration, according to the regulator.

The FCA said it helps crypto firms applying for authorisation by “communicating our expectations and issuing guidance on good and poor practice” in order to help firms understand what is required.

In 2023-24 the FCA implemented new rules to support the extension of the financial promotion perimeter to include promotions of many types of cryptoassets.

Under the new rules, firms marketing such cryptoassets to consumers in the UK must ensure, amongst other things, that promotions are clear, fair and not misleading. This helps consumers better understand what they are purchasing, and the risks involved. Consumers now also benefit from a new 24-hour cooling-off period.

The regulator issued 450 consumer alerts against firms illegally promoting cryptoassets in the first 3 months of the rules going live, according to its annual report.

The FCA warned in August that it had found “multiple instances” of cryptoasset firms failing to meet the new marketing standards. It said that firms need to improve compliance to avoid regulatory action.

The regulator issued its first fine to a crypto firm in July.

It issued a £3,503,546 fine to CB Payments Limited (CBPL) for repeatedly breaching a requirement preventing it from offering services to high-risk customers.

CBPL is part of the Coinbase Group which operates a prominent cyptoasset trading platform.

CBPL does not undertake the cyptoasset transactions for customers but acts as a gateway for customers to trade via other entities within the group.

The firm is currently not registered to undertake cryptoasset activities in the UK.

The fine follows CBPL entering into a voluntary requirement with the FCA in October 2020 which prevented the firm from taking on new high-risk customers.

According to the FCA, despite the restrictions in place, CBPL provided e-money services to 13,416 high-risk customers.